Los Banos school district plans for ‘rainy day’ while passing $121 million budget

The Los Banos school board on Thursday passed a $121.3 million budget for the 2017-2018 fiscal year that focuses on increasing reserves while planning for future school construction.

The balanced budget results in a $355,377 surplus, which will go toward increasing the district’s fund balance to $10.54 million, or 8.7 percent of the total budget.

Fiscal Services Director Don Laursen said that the recommended fund balance for government agencies, including cities and school districts, was 16.7 percent of the total budget, according to the Government Finance Officers Association.

“That’s to handle unforeseen things that happen,” Laursen said.

Laursen said California’s local school districts are often at the mercy of the state economy. So the school district is trying to manage costs to prepare for the proverbial “rainy day.”

The new budget has nearly doubled in the past five years, according to budget documents.

Laursen said that was due to two factors: economic conditions, and continuing influx of students.

Laursen said as the state has recovered better than expected since the 2008 recession, so has funding to education due to Proposition 98, which mandates a minimum of 40 percent of the state budget be allocated to education spending.

That means the state’s educational institutions and agencies often are most affected when the state economy changes, Laursen said.

Future growth in Los Banos has many school officials concerned about the district’s increasing facilities needs.

During the June 7 Los Banos City Council meeting, Board President Anthony Parreira and Trustee Dennis Areias asked the City Council to consider the current lack of capacity for more children as the city approves more housing projects.

“We’re going to have to build more schools,” Laursen told the school board during a June 8 public hearing on the budget.